JEFF PRESTRIDGE: Grim legacy of HSBC's branch retreat

First, the good news. After much foot-dragging, HSBC has agreed to allow personal customers, some nine million of them, to do their banking at 11,500 Post Office branches – if they so desire. Most High Street banks already offer such a facility.

HSBC’s move is long overdue – and will not come into operation until next spring – but it will go a little way towards appeasing those customers who have recently lost their local branch (and often their only nearby cash machine).

Already this year, 45 out of 1,219 branches have been axed as HSBC drives customers towards impersonal internet banking.

The Post Office tie-up is comprehensive, which is great news. It will enable HSBC customers to make cash withdrawals and deposits, cheque deposits and balance enquiries.

In contrast, some competitors, such as Royal Bank of Scotland/NatWest and Nationwide, do not allow their customers to pay in at the Post Office – presumably because they want their customers to pay in at their own branches in the hope of persuading them to buy a financial product.

Now the bad news. HSBC’s tie-up does not extend to its small-business customers, presumably because post offices cannot cope with demand. It is a shame because 60 per cent of small businesses bank at their nearest branch at least once a week while ten per cent bank every working day.

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If their branch closes and the local post office is off limits, it means they will have to travel farther afield to bank their cash – an unnecessary inconvenience when many small businesses, especially independent retailers, are struggling to survive.

Also, don’t think HSBC’s tie-up with the Post Office indicates a positive stance on the value of High Street banking. Far from it. Indeed, I would not be surprised if HSBC uses it to adopt an even more aggressive approach to branch closures.

HSBC has shut more branches (386) than any of its rivals over the past ten years. And last week, it confirmed to Financial Mail that between now and the middle of December, 23 more will be axed – the first two on Friday.

Make no mistake, HSBC is slowly withdrawing from the High Street, especially in rural communities where often it is the last bank in town. This will cause great destruction among communities, trigger the death of many High Streets, and do little to get Britain out of the economic mire.

Will auto-enrolment into workplace pensions, due to start next month, herald a pensions renaissance?

Pensions Minister Steve Webb is hoping so, judging by his confident prediction that 7.5 million workers could join company schemes for the first time as a result.

It is difficult to argue against his pension initiative. As a nation, we are not saving enough, with the result too many people are entering retirement dependent on benefit top-ups to give them a tolerable standard of living.

Auto-enrolment, Webb believes, will enable more people to be self-sufficient as they build pension pots with a little help from their employer (in the form of top-up contributions) and the State (in the shape of tax relief).

Only last week, figures from the Office for National Statistics showed Britain has seriously lost the pensions savings habit. As a result of the demise of defined benefit company schemes and the financial strain on many households, the number of Britons contributing to workplace pensions has fallen to its lowest level since records began in 1953.

No one can dispute auto-enrolment will bring more people into the pensions fold. And with the country’s biggest employers signing up to this deal first, it will get off to a flying start. Webb believes 600,000 workers will be auto-enrolled by year-end.

The Co-operative, for example, will auto-enrol 40,000 staff in January at an annual cost to the business of £15 million. Most will be part-time workers under the age of 35.

Although it will be expensive, the cost must be set against the £160 million a year the Co-op already spends on pensions.

But it is when the backbone of business – the army of small employers – is required to auto-enrol staff (April 2015 and beyond) that we will begin to discover whether this initiative is transforming. Most small firms will see it as another tax and yet more red tape (the rules on auto-enrolment are a nightmare).

Some will do everything possible to get staff to opt out. Unless the economy improves dramatically, auto-enrolment could be more destructive than constructive.